In general, gold price always moves up 2-3 months before Chinese lunar new year and down after Chinese new year. The lower US dollar (3 years low last week) does help the gold to move up recently. IMO, dollar has reached the bottom and gold will go down. I will not be surprised if gold price go down 10-15 % in the next three months, after Chinese new year.

Chinese Governoment may starts to collect real estate property tax sometimes this year. Apparently, the higher down payment for second home has not stop the speculation in the housing market. The property tax will defintely affect the investment strategis of most mid-income Chinese.

You gave a somewhat similar opinion when the valuation of the 2016 1gm gold panda coin went crazy. You were right; the hype died down and the dust settled!

If you turn out right again, then one must carefully note this as a fact that events in China alone may have an impact (?positive and/or negative) on world bullion prices. The kicker would then be how predictable this is as a guide to world or Chinese bullion purchase or speculating.

This rally in gold is all on paper, demand for physical bullion is the lowest I have ever seen. If it wasn’t for the paper gold markets gold could be down in the $700-$800 range. Just a year ago silver eagle always had a bid of $2.25 over melt, today you are lucky to get $0.50 for the common years, and for stray rolls that have been searched melt if you are lucky. Even gold bullion bids are at melt. Same goes for recent Chinese panda, mainly due to exchange liquidation for silver and very little demand for gold.

This rally in gold is all on paper, demand for physical bullion is the lowest I have ever seen. If it wasn’t for the paper gold markets gold could be down in the $700-$800 range. Just a year ago silver eagle always had a bid of $2.25 over melt, today you are lucky to get $0.50 for the common years, and for stray rolls that have been searched melt if you are lucky. Even gold bullion bids are at melt. Same goes for recent Chinese panda, mainly due to exchange liquidation for silver and very little demand for gold.

Arif, I quite agree with your second paragraph except I think there may be a typo. Do you mean, "Chinese stock market is red hot."?

Regarding the first paragraph, a prominent gold dealer – whom I respect and who has been in the business since the 1960s – made an interesting claim in a China Pricepedia interview. He said that physical demand for gold by the public is a lagging indicator, not a coincident or leading one. The early stages of a bull market generate skepticism and more selling from the public, not buying. So the first wave of buying does not come from the public and low premiums for coins are typical.

If his observations hold, then late 2016 and 2017 were the final bottom of this cycle. That so many people are still waiting for the price to drop again is consistent with his experience. I don't have a crystal ball, but think that may be useful information..

Thanks for the information, Peter. What did the bullion dealers say about bar sales? If the Chinese public was not buying, then who was? Buying quite a lot actually.

As for the pandas, does it mean they might become key-date coins?

Everyone, without exception, tells me that business for gold and silver is bad, so I don't think that bar sales are an exception. Who is buying gold now in China? Nobody connected to coins as far as I can tell.

I started writing in China Pricepedia as early as last July that 2017 Pandas could turn out to be a key date. At that time it was possible, with careful shopping, to get NGC MS70 2017 Pandas for barely above melt value. 15 gram 2017 gold Pandas in 70 could be purchased in quantity on eBay for around $670. As much as 10% of that amount could be gotten back in eBay Bucks with a coupon making the net cost around $600 for a 70! I even included a link to a dealer who had dozens available.

The complete lack of interest in the coins was striking (pun intended). Key date stature is still possible and I am still doing research. Semi-key looks very likely, at least.

As for 2016-2017 issues, nobody is melting them, instead bullion investors are buying them as a pure bullion play, so when their spread becomes 20%+ hoards can be released and kill any price movement. They made too many of them to be special IMHO. 10 years from now we'll see who is right. I think post 2011 is uninvestable from a numismatic perspective.

Too many of the big US coin dealers selling 2017 in quantity very close to melt for most of 2017. 2017 may be better than 2015, but both I think are much more plentiful compared to anything from 1989-2010. I got an investor to buy 100x 2017 1/2 at melt plus 5% from me based on your article in pricepedia, another investor I know probably bought 30-50 from another dealer at 4% over. When I look at the type of buyers that eventually bought them, the hoard risk is too great. We all saw what happens when 100 pieces of 1997 1/2 hit the market this last summer and fall or Stacks/Bowers dumping of lunar coins a few years back in multiple back to back auctions, the market isn't deep enough to absorb 100 pieces of any coin over short period of a few months.

I don't agree physical demand is a lagging indicator when prices are rising, when prices are falling, yes physical demand is a lagging indicator. Right now we have some of the strongest paper momentum in the gold market, yet nobody wants physical gold, they all want paper gold.

With greater acceptance of digital assets happening all over the world, I think physical bullion will have a smaller role in the investment world, people will prefer to own paper gold in lieu of bullion. Numismatic gold and silver will continue to be desirable, because they can't be replaced by electronic trading as the chinese exchanges found out. All my purchase of bullion will be either GLD, mining stocks or via futures, I have no desire to buy physical bullion anymore even if it is discounted below melt. Of course if world war III breaks out I will be sorry with the last paragraph, but I don't think I need to plan my future based on a war scenario in which no one will survive.

Strong gold demand in China last year is a fact, especially gold bars, driven by investors buying as reported. Could it be bullion coins (pandas) are out of favor? This would be a scenario I really hate to see.

Here in the US, gold ownership has never been so popular. I can't name even one white firend of mine who's owned any gold. And banks are making it harder by telling customers not to store gold bullion in their safe deposit boxes. For investment purpose I do agree it is much easier to buy GLD or other gold investment trusts. For more leverage, buy gold, silver ETFs, and if risk factor is tolerable, buy individual mining shares.

Physical demand of gold is there, just not much in the US. Globally, central banks were buying too, lead by Russia. IMO 2017 gold pandas are good buys at bullion price, plus the potential to become semi-key dates 10 years from now, if one does not have any bullion as core holdings already. If world war III breaks out, and Paper money becomes worthless, at least I have a few gold coins to buy food, until the end. As least I don't die starving.